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IRS, US tax Confusion: Offshore freelancers don’t need ITIN

I had been trying to get my individual tax id from IRS since January because the company i’m working for told me that I needed it in order to get full payments, otherwise they had to withhold 30% of my monthly fees according to IRS regulation. People said it would be a long process, and they are right!

After months exchanging emails with a tax consultant, getting the required papers from the company & from SSA office in the US embassy in Manila, sending my passport to a friend in the US to get a notarized copy, etc., I received a letter from IRS saying that my application was rejected because my passport copy was not properly notarized. I was puzzled so I asked my manager in the US to call IRS to get a clarification. After about an hour of getting transferred from one IRS agent to another (it would cost me a serious amount of $ if I called them myself), he finally got to talk to someone who could answer our inquiry. The answer is … I don’t need/qualify for ITIN because I perform my work in Indonesia, not in the US. The agent referred to this IRS publication, specifically the part that reads:

[box title=”Quote” color=”#333333″]Services performed outside the United States. Compensation paid to a nonresident alien (other than a resident of Puerto Rico, discussed later) for [highlight]services performed outside the United States is not considered wages and is not subject to withholding[/highlight].[/box]

So if you’re working remotely for a US company and the company asks for your ITIN, show them the publication.